In today’s day and age, companies must necessarily engage in mobile application development to stay relevant and abreast of the competition. However, developing a mobile application is not an easy task sat the best of times due to the significant time and costs involved. To minimize risk in this endeavor, some companies choose to outsource their app development to developers in other countries like Pakistan, India, Indonesia, and, more recently, Mexico.
Despite Asia’s reputation as a hub for outsourcing IT development, Mexico has quickly become a significant contender following substantial investment in the industry. In this article, we discuss why IT outsourcing Mexico is so popular.
Why do you need to outsource development?
There are two main reasons why organizations choose to outsource business software development.
- Reduce cost
- Focus on core functions
By outsourcing to a third-party that specializes in IT development, business cash in on the benefits of specialization, and the fact that most of the best IT developers come from countries of affordable human resources and operating costs. Usually, a specialist company will complete a job faster and less expensive than in-house development.
Advantages of software development outsourcing to Mexico
Now besides the distinct advantages mentioned above and later on in this article, there is one element that has become a differentiator in another wise homogenous industry, “nearshoring.”
Nearshoring is the term used to describe situations where businesses outsource processes to an offshore IT development company located as physically close as possible. Traditionally, Asia, Africa, and Eastern Europe form the largest pool of overseas partners. However, with the growing demand for nearshoring, companies based in the USA prefer outsourcing to Mexico since communication is more accessible, teams work in similar time zones, and quality checks are more manageable. Some of the most significant advantages include:
Large talent pool
One of the most significant advantages available to IT development companies based in Mexico is the large pool of available talent. Given the substantial investment in STEM education by the government and the numerous benefits given to STEM students, Mexico offers a wide range of technical professionals with both knowledge and experience in a growing economy. Not only does this pool size mean US companies have more to choose from, it means they can spend fewer resources on finding a good hire. Each year, Mexican universities graduate over 100,000 STEM graduates who add to an already burgeoning talent pool.
A growing country with a mature infrastructure
In recent years, both the Government of Mexico and private developers have invested heavily in IT businesses and technology parks throughout Mexico. The Monterrey Technology Park, Guadalajara Software Center, and the Apodaca Technology Park are only some of the many areas that easily contend with similar setups in the USA. Guadalajara, which is Mexico’s equivalent of California’s Silicon Valley, boasts a technical workforce comprised of more than 115,000 technical professionals.
Furthermore, some significant corporations such as Oracle and Amazon are looking to expand operations into Mexico and do away with the operating remotely, which is why such companies are focusing on recruiting local talent and building a presence here. More international brands are looking to offshore or employ IT teams directly in Mexico means more startups and software companies, which means more competition. This increased competition will drive innovations and efficiency improvements amongst software engineers, developers, and specialists in fields such as machine learning and cybersecurity.
Ease of collaboration with partners
Given the level of communication technology available today, collaborating with partners and teams around the world is quick and easy. However, there are certainly other factors to consider, such as the physical distance between two countries and the difference in time zones. For example, for a company in the US, working with IT developers in Asia entails a gap of almost 10 to 12 hours. You would have a tiny window in which both parties are awake at a reasonable hour and available for meetings and discussions, and so on. In this case, you’d be lucky to get a response or action the next working day, even from the most alert outsource partners. However, when outsourcing IT development to Mexican developers, the time gap is negligible since it is in the same time zone as most US states give or take 30 minutes.
Furthermore, traveling between Asia and the USA is a physically draining affair. Long flight times and strenuous airport checks leave individuals exhausted and irritable, which is not a good state to be in for a meeting. However, flying to Mexico isn’t such an ordeal. You can be in Mexico in around six hours from most US international airports. Compared to the 13 to 15-hour flights to Asia, its like a walk in the park. Therefore, if the situation calls for a meeting face-to-face, it will save time, money, and effort for everybody involved by outsourcing to Mexico. Not to mention, you’re getting almost real-time collaboration efforts with a professional, hardworking attitude and a commitment to results.
Higher retention rates
For the most part, Mexico’s IT industry boasts a pretty low attrition rate of about 12% (as of 2018). Given the dynamic nature of business and technology, this is a significant advantage. The advantage is because lower attrition rates mean US clients are more likely to engage with the same individuals or teams at every interaction. Not only does it improve communication, but it also removes the need for reacquainting the developer with the client and the client with the developer’s personality.
Dealing with the same people each time also means you are more likely to receive support from the same people. If that is not possible, the company can quickly build a relationship with senior staff, thereby bypassing regular channels and getting immediate and direct assistance.
Service delivery at its finest
Unfortunately, Mexico has never had the best of reputations in terms of service quality and maturity, and a reliable partner. As a country, it still has much catching up to do in terms of the world’s perception of Mexico. However, the government of Mexico now takes great pains to ensure that the IT industry is up to mark and holds the ability to satisfy clients around the world. Be it accommodating students and professionals, are helping IT companies develop infrastructure. In much the same way, the government, along with the private sector, places great emphasis on service delivery. If clients are happy, business is good. Therefore, when IT outsourcing to Mexico, you can expect the same level of professionalism and agreement on timescales and deliverables.
IT outsourcing to Mexico pays for itself.
As mentioned earlier, the low cost of outsourcing to Mexico is one of the biggest attractions for any US company. By looking for a partner in Mexico, you can continue to scale operations without the added bulk of administrative work that comes with it. For example, managing salaries, recruitment, training in the more expensive business environment in America.
Let us examine the difference between the US and Mexico in terms of salary and put things into perspective. In the US, a software engineer earns around USD 100,000 annually. However, in Mexico, an engineer with the same level of qualifications can expect to receive about USD 45,000 annually (or lower). Even in less developed cities in the US, home-grown software developers have the advantage due to the rampaging demand for IT development and the inevitable subsequent shortage of suitable talent. Either way, this difference translates directly into savings for your company.
Additionally, the cost of coordinating projects is significantly lower in Mexico. The shorter distance means smaller travel and transport costs. In the same way, being in the same time zone makes for better collaboration, which in turn reduces the possibility of mistakes. Even though IT development is always an ongoing process, minimizing the number of revisions or getting it right the first time saves money.
Limited language barriers and culture shock
One of the most significant drawbacks when outsourcing IT is the potential for misunderstandings due to a language barrier. Even though English is an international language, most do not speak it well. Similarly, there is a significant culture clash between the US and most Asian countries. With that in mind, Mexico is the best option for US-based companies. Both English and Spanish are widely spoken languages on both sides of the border, so finding common ground is more natural. Furthermore, given the proximity, there is a blend of cultures on either side, which helps reduce friction (if any) between individuals.
Furthermore, the most prestigious STEM university in Mexico, the Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM), has 26 campuses spread out all over the country. Their mission is to graduate exemplary professionals with the skills necessary to tackle the world. Therefore, you are likely to find the same levels of professionalism and commitment to delivery in Guadalajara as you would in California.
How to mitigate the risk of IT outsourcing to Mexico
Of course, outsourcing does come with its bundle of difficulties, risks, and downsides. Before you select a partner and commit to a project, here are some of the things you can do to manage the dangers:
- Verify all relevant details concerning experience and past clients and testimonials. If you are unsatisfied with the evidence, move on;
- Find an expert within or without the company who can review the work and check for issues. Especially when integrating a new tech stack;
- All timelines, milestones, deliverables and payment schedules must be finalized, put on paper and signed by all concerned parties;
- Keep up regular communication and make sure channels are open both ways. A consistent flow of followups and feedback going both ways ensures there are no misunderstandings and subsequently, mess-ups;
- Even though Mexicans and Americans share a significant amount of culture, make sure not to tread on any toes. Do your homework on the people you’re working with and try and make them feel comfortable;
- Try and hire a local Project Manager who knows the people and the region and knows how to get things done. By default, being a local equips the manager with the knowledge to handle changing situations better;
- Make sure to prepare your company and those working in it for the outsourcing project. They should know how things will work and what to expect.
Disadvantages of distance outsourcing
No matter the cons of outsourcing in general, nearshoring improves many of the factors that make outsourcing a problematic prospect for US-based companies. Here are some of the drawbacks of offshore outsourcing:
- You lose some degree of control. It is inevitable and therefore, tread carefully;
- Often there are hidden costs which find their way into the billables catching you unawares unless you understand the culture well;
- Security risks are significant in terms of data leaks;
- Understanding the culture becomes more and more difficult the farther you go from your home country;
- Despite the apparent advantages of specialization, companies specializing in dealing with outsourcing requirements find themselves spread thin and may not be able to deal with your demands accurately;
- Given the extreme differences in language and the perception of certain words and actions, necessary instructions are often lost in translation.
Despite the pervasive perception of Mexico as a lawless land ruled by gang violence and drug cartels, Mexico is a safe and secure haven for IT development. US companies outsourcing to Mexico take advantage of competitive and robust labor force poised to deliver excellence. Mexican It companies can offer you real-time collaboration, on-time deliveries of what you need without the higher costs of recruiting an in-house team, and adding administrative business processes.
Furthermore, IT outsourcing Mexico offers grants access to more than 100,000 fresh STEM graduates a year; advanced technology and business parks, proximity to most US international airports, low employee turnover, professionalism akin to a US workforce, and significant savings in terms of cost, time and effort.
However, make sure to research the company you intend to hire by verifying testimonials and claims of experience.